BHP has owned up to employee leave and contractor allowance errors that are expected to cost the major mining company about $430 million to remedy.

The company has launched a review of its payroll systems and self-reported to the Fair Work Ombudsman.

A preliminary review suggested leave for some rostered employees across the company’s Australian operations had been incorrectly deducted on public holidays since 2010, the company said.

About 28,500 current and former employees are affected, with an average of six days’ leave incorrectly deducted over the 13-year period.

Initial investigations indicated OZ Minerals had been affected by a similar leave deduction issue before being acquired by BHP in May, the company said.

In addition, the company has identified that about 400 current and former employees at Port Hedland are entitled to additional allowances due to an error with the employment entity in their contract.

The Mining and Energy Union said the underpayment in employee leave entitlements had been uncovered as a result of a major union win in the Federal Court against BHP’s labour hire subsidiary Operations Services, clarifying employee rights around public holidays under the National Employment Standards. 

Mining and Energy Union general secretary Grahame Kelly said BHP had been sprung ripping workers off and the union would ensure affected members received their full entitlements

“Today’s revelation goes to show that we need to keep up the pressure on big companies like BHP to do the right thing,” he said. 

‘Not good enough’ – Slattery

BHP president Australia Geraldine Slattery (left) apologised to all current and former employees impacted by the errors.

“This is not good enough and falls short of the standards we expect at BHP,” she said.

“We are working to rectify and remediate these issues, with interest, as quickly as possible.”

BHP has engaged Protiviti to conduct a thorough review of its payroll systems.

It said the company would contact affected current and former employees regarding remediation as soon as possible.

A dedicated hotline and website will be established to provide assistance from Friday.

It is estimated that the cost of remediating the leave issue and the contracting issue will be up to $US280 million ($430 million) pre tax, incorporating costs including BHP’s share of associated superannuation and interest payments.